The governments of the Flemish and Walloon Regions have recently each passed a law reducing registration duties on the acquisition of a property intended as the main residence. This reform, which will come into force on 1 January 2025, benefits not only first-time buyers, but also existing home owners, providing they sell their other home(s) within a certain time. The aim of the measure is to stimulate the property market by facilitating access to real estate.
When we compare this new registration duties regime with those applying in countries neighbouring Belgium, we find that the Walloon and Flemish Regions are aligned with the rates most used in continental Europe.
At present, the rate for registration duties for properties located in the Walloon Region is 12.5%, with rates being reduced to 6% and 5% for properties considered “modest”, combinable with a system of abatement. With effect from 1 January 2025, this rate will be 3% for the acquisition of a sole, owned home. There are several conditions that have to be met in order to benefit from this new rate:
- not owning another home: the buyer may not be the owner of another property used in whole or in part for residential purposes. However, if the buyer is already an owner, he/she can benefit from the reduced rate providing he/she sells his/her property within three years of acquiring the new one.
- main residence: The buyer must make this property his/her main place of residence within three years of the acquisition. If the acquisition is of a plot of building land, a construction or an off-plan acquisition, this time period is extended by two years.
- commitment to remain in residence: The buyer must commit to remaining in this property for three years from when he/she establishes his/her main place of residence.
In the Flemish Region, the rate of registration duties for the purchase of a property as a family home is 3%. This rate will be reduced to 2% with effect from 1 January 2025. The conditions for benefiting from this rate are identical to those applying in the Walloon region, with a few exceptions:
- a residential house or apartment: This reduction does not apply in Flanders if a plot of land or a building under construction is concerned.
- classic purchase and sale: The purchase of the property must be carried out by means of a classic sale transaction, and not by any other means.
These amendments will be to the detriment of certain types of financial assistance, which will be discontinued, such as the abatement of part of the registration duties for first-time buyers, the “chèque habitat” tax credit and the reduced rate for “modest” homes.
By Actalys, Brussels (Belgium)
